But speaking after a meeting with Mr Klestil, Mr Schuessel said that Austria needed a new government to replace the caretaker administration that has been in place since inconclusive elections last October.

"Austria is an open-to-the world, stable country," he said. "But it now needs a functioning government fast."

Mr Schuessel insisted that there was no threat to democracy or human rights in Austria.

He criticised the joint warning by the 14 governments, saying it set a dangerous precedent for interference in the domestic politics of a fellow EU member state.

Freedom
and human rights are just as secure here as in all other
European countries, and that's the way it will stay.

Wolfgang Schuessel

He said that the best way of countering the international concerns about the coalition was to allow the parties to present a new government programme which would demonstrate Austria's continuing commitment to the EU's guiding principles.

Mr Haider has said that if a coalition is created he would leave the job of chancellor to Mr Schuessel.

Jospin makes appeal to Austrians

However, French Prime Minister Lionel Jospin warned that Austrians needed to wake up to the dangers of the far-right before it was too late.

"The ideas of the Freedom Party are contradictory to the
principles on which the European Union was founded," he told the French Parliament on Tuesday.

Jean Marie Le Pen: Support for Mr Haider

Voicing his support for the EU threat to isolate
Austria, he added: "The aim is to make the Austrians wake up and see that this
project is broken off.

"If it is not France will have to take
every measure to see that the Austria of Mr Haider and Mr
Schuessel are politically isolated in Europe."

But the Freedom Party leader was defended by the far-right French politician, Jean Marie Le Pen of the National Front.

"Mr. Haider democratically won almost 30% of
Austrian votes, and, according to elementary rules of democracy,
he should be able to take part in a coalition government," he said.